Self Insurance Etcetra

Group Medical

Prescription drug plans are offered by a number of Prescription Benefit Managers (PBM) on a local and nationwide basis. There is no magic about this. Most PBMs use the same network of pharmacy chains and regional and local operators. The pharmacy units number about 35,000. Software programs of various flavors provide the communication between pharmacy and the PBM who communicates the activity with the employer who pays the bill. Each PBM will have its own administration software which may offer advantages over another one.

The costs do vary between PBM and is based on the Average Wholesale Price (AWP) plus or minus a dollar amount or percentage. In addition to the cost of the prescription, there is the fee to the pharmacy for dispensing the drug and an administrative fee to the PBM for administration and management reports as well as the financial aspects of the program.

The style of the prescription drug card will vary. One company offers a gold credit-style card and without charge for most groups.

A variety of management reports are available including statistics on physician's drug dispensing as well as the frequency of drug refills to detect any abuses of the plan. A plan that uses the ICD-9 diagnoses codes can be a valuable tool for the disability claims administrator.

For self insurers of group medical plans, one PBM has arranged with several stop loss carriers not to increase the aggregate loss fund for the addition of a prescription drug plan. Apparently, the lower costs due to the discounts and a managed care aspect more than offsets any increase in claims costs to the loss fund.

Further information on Managed Prescription Drug plans is available.

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